How might RCW 19.100.180 affect the Black Bear Diner franchise agreement?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
This Agreement and the rights of the parties will not take effect unless and until this Agreement is accepted and signed by Franchisor. Except to the extent this Agreement or any particular dispute is governed by the U.S. Trademark Act of 1946 or other federal law, this Agreement shall be governed by and construed in accordance with the laws of the State of California (without reference to its conflict of laws principles), excluding any law regulating the sale of franchises or governing the relationship between a franchisor and franchisee (developer), unless the jurisdictional requirements of such laws are met independently without reference to this Section; provided, however, that if the covenants in Section 10 of this Agreement would not be enforceable under the laws of California, and the Development Area is located outside of California, then such covenants shall be interpreted and construed under the laws of the state in which the Development Area is located.
Source: Item 23 — RECEIPT (FDD pages 56–243)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the Black Bear Diner franchise agreement specifies that it is generally governed by California law, but makes an exception for certain situations. Specifically, section 13.1 states that the agreement is construed in accordance with the laws of California, excluding any law regulating the sale of franchises or governing the relationship between a franchisor and franchisee, unless the jurisdictional requirements of such laws are met independently without reference to this section. This means that if a state law like RCW 19.100.180 (presumably a law regulating franchise sales or franchisor-franchisee relationships) has jurisdictional requirements that are met independently of the agreement's choice of law, then that state law could apply.
For example, if a Black Bear Diner franchise is sold in Washington state and the jurisdictional requirements of RCW 19.100.180 are met without relying on the franchise agreement's terms, then RCW 19.100.180 could potentially govern aspects of the franchise relationship or sale, even though the agreement generally defaults to California law. This could include provisions related to disclosure requirements, franchisee rights, or termination procedures, to the extent that Washington law differs from California law.
However, the franchise agreement also includes a clause addressing the enforceability of covenants. It states that if the covenants in Section 10 of the agreement would not be enforceable under California laws, and the Development Area is located outside of California, then such covenants shall be interpreted and construed under the laws of the state in which the Development Area is located. This suggests that the parties intended for the agreement to be interpreted in a way that makes the covenants enforceable, even if it requires applying the laws of the state where the franchise is located rather than California law. Therefore, it is possible that RCW 19.100.180 could affect the Black Bear Diner franchise agreement if the jurisdictional requirements are met and the application of California law would render Section 10 unenforceable.